Van Tharp Institute Peak Performance Course for Traders. My journey through the course.

[Rob C 826]

 

Van Tharp Institute Peak Performance Course for Traders

 

First an update on previous assignments. I finished listening to the audio book The Secret and I am trying to apply the methods. It teaches you how to use the “Law of Attraction”. Thus, attract the things you want. Essentially, it is about positive thinking. The book wants you to assume the best thing will happen. Ask for what you want, then assume you already received it then give thanks (be grateful) for receiving it. They do explain the process in a new age spiritual context, but it’s OK if you don’t believe in that. This method seems to be working already and I think about it scientifically.

Yes it has been great getting the best parking spot, when I go home each night, 3 nights in a row now by just assuming I will get the spot (and being thankful for it). But this method is much more than that. I usually face a problem by thinking of worse case scenarios and determine ways how to prevent them. But for the last few days instead I have tried to think how grateful I am that this problem is going to be solved with little effort and stress. I woke up this morning feeling very positive about the day. This is highly unusual since I usually wake up dead tired and dreading the day. I was even searching why I feel so positive, until I realized because I have been thinking positively.

Later in the day I then realized I haven’t taken a No Doz pill in 3 days. I pop these things every day. Why is that? I am still getting the terrible 5.5 hours of sleep a night, why do I have all this energy. Apparently, negative thinking is draining on the body.

So I do recommend the book The Secret and be prepared for the new age spiritual thinking. It’s OK either way you take it. As for my great parking spots was it the universe feeling my positive vibs? Or just that I never get those spots so I haven’t looked in a year. The person who always takes them might have moved away months ago and I never would have known unless I tried to look. By thinking positively it opened up the possibility. Can you imagine how well that would work when looking over charts in trading? You see what you want to see.

 

As for my complete failure in the stress test, I am hoping the course work and the books will help with my worrying, but I can help with the stress protection right away. I have already stepped up my exercise and I have tried to increase my nonexistent recreational life. I stopped listening to books on trading and psychology and will alternate with a fun book to read. I have installed an 8 foot slackline in my home office, which I think is essential to all home offices J I was feeling guilty about it at first, but it seems my daughter likes using it too so I feel better about it. And I will start watching movies that I want to watch. I always just watch what my kids or wife is watching. Though I will probably only have about 20 minutes a day to watch (while I am eating lunch) I am going to start. Avengers 2 is first on the menu. My wife had no interest in watching it so I never did.

 

Vol 2: How to control stress

Chapter 3

There are two divisions to the autonomic nervous system which is the part of the brain responsible for the fight-flight reaction. The sympathetic nervous system which is responsible increasing your energy (like heart beating faster). And the parasympathetic nervous system which is the calming part (lowers blood pressure).

There are several theories about the relationship of stress and the autonomic nervous system

1)    Arousal Theory which assumes that anger, fear and pain were associated with the response of the sympathetic nervous system which produce stress. If no activity occurs to use up this energy created for fight/flight response, the result can be destructive to the body. This is what happens during trading and a stream of market losses can leave you “stewing in your own juices.” If you stew too long enough, the result will be destruction to the body or physical illness.

2)    The General Adaptation Syndrome where it is theorized that every demand on the body produces two kinds of bodily responses, those specific to the demand and those that are general. When distress exists in sufficient quantity, it produces the alarm state, which is similar to the fight/flight response. If this reaction persists long enough the body adapts to it. So the body can appear “normal” even though it’s combatting stress.

Both models assume:

We all experience stress, since any demand on the body creates a stress.

Stress effects on the body are cumulative.

Each person has a breaking point, beyond which powerful reactions occur in the body.

Stress is harmful to the body if it occurs in high quantity or lasts long enough.

 

Other theories which suggest the mind plays a major role in stress production:

1)    Jacobson’s Muscle Tension Model. Dr. Edmund Jacobson noticed that muscle tension always seemed to accompany anxiety or stress. He concluded that mental images of uncertainty caused muscle tension. He also believed that the problem was not some stressor in the environment, but one’s thoughts about the stressor. If this theory is correct, then stress comes from our interpretation of an event rather than from the event itself.

2)    Ideo-Motor Theory is that people’s emotional reactions are a result of the way they interpret reality. A trader than would become anxious over a loss only because he thinks the loss makes him a victim or in some way lowers his status as a human being. The interpretation of the event, rather than the event itself, produces the stressful experience. Many a trader fear a loss long before it occurs. The trader who decides that he lost because he was “defective” or a “victim” of circumstances will get an entirely different perspective than the trader who decides he lost because he needed to learn something.

3)    Two-Component Theory is the concept that the stress one experiences actually consists of two components (emotion and worry). Emotionality is like the fight/flight response. Worry involves a conscious concern for one’s performance and its consequences. Research has shown that worry has a greater impact on human performance than emotionality. A study shows that people who worry about their performances on an important examination spend at least 25% of their conscious thought worrying about the outcome of the exam, rather than devoting effort to taking it.

[Rob C 826]

 

Van Tharp Institute Peak Performance Course

Vol 2: How to control stress

Chapter 4 

People have a limited capacity for dealing with information that comes through the senses. The requirements of highly demanding tasks can exceed available capacity, so one can only concentrate on a small portion of the information. Understanding the limitations to processing information, therefore, is the key to understand how to be successful as a trader.

The trading decisions (open/close a position) must be made by human beings with a limited capacity for handling information and expectations that limit information they do process.

Three factors are essential to successful trading:

1)    A healthy psychological profile

2)    The ability to make accurate decisions from a large amount of information

3)    Position sizing and discipline

 

The successful trader might describe him/herself as follows (It’s amazing how much this describes Andrew – who is climbing the Matterhorn at the time of this writing):

1)    I enjoy life to the fullest. I am constantly exploring new ideas, visiting new places, experiencing change and having fun. I try to get everything I can out of life and eagerly look forward to each day.

2)    I am in the best of health because I eat proper foods, get plenty of exercise and sleep well. I am never overly stressed because I do not fell pressure – only challenge.

3)    I have an open attitude. (This will help a trader in the market because it enhances information processing capacity).

A losing trader might describe himself as:

1)    I am really unlucky. Every time I try to trade, something goes wrong. I end up losing. Other people make it impossible for little guys like me to be a winner. Perhaps that is why I seem so depressed all the time. Money sure has been my downfall.

2)    Trading is very stressful to me, perhaps because I worry about what will happen all the time. But I also worry about what will happen if I get out of the markets. I’ll probably never be able to get ahead in life.

 

People have natural inclinations or biases in their decision making. These biases are called judgmental heuristics (shortcuts).  

 

Chapter 5

Stress tends to narrow the number of alternatives that one can consider, it impairs the selection decision. The information that must be processed to make a successful selection decision may already exceed one’s capacity unless one has developed as adequate model for handling the information. But reverting to primitive decision making models or well-practiced modes of behavior is also inadequate for investment decision making.

Normally your brain gets about 50% of the blood flow from the heart. But under stress that goes down to 20%.

Physical danger does not appear to reduce the processing capacity of worriers any more than people who seldom worry. But when a situation involves a threat to an individual’s self-esteem, worriers show a large capacity reduction. Thus, people who fear failure lower the odds of trading success dramatically.

Incentives behavior have an effect on trading. Thus, the difference in trading performance between paper trading and live trading. Real money is an incentive. Incentives tend to impair performance in complex tasks, by focusing on the outcome and not the actual task. An experiment, with a group of students, showed that financial incentive actually caused the students to need double the time to create a solution to a problem than the group without an incentive. Thus, the trader is too preoccupied with the potential results of what he is doing, rather than the process of being a trader. They have become results-oriented.

 

The course lists “Questions for Thought” and I have listed my responses:

1)    How much of a factor do you think the fight/flight response is in your trading? My pounding heart, usually after I enter a trade, convinces me the fight/flight response is quite active in my trading. It’s the dominate factor when I trade.

2)    List several ways worry might affect your ability to function as a trader. My decisions become rash and 1^st order responses. I lose the ability to think on my feet and make the simplest decision. FOMO is high. Too impatient to wait for the setup. Take partials too quickly because I am worried about the winning trade becoming a loser. I take too small of a share size.

3)    How do you think your interpretation of a loss will affect your ability to function as a trader? What interpretations will serve you best? I always consider a loss that it will be the first of a string of continuous losses that will lead me to determine I cannot become a trader and quit. Of course I should think of a loss as a successful trade. If I waited for the setup, got a good entry then determined it wasn’t going to work out this time and exit at the best time. That was a good trade.

4)    What models do you select information for making the basic trading decision? What information do you ignore by using these models? Is that important to you? I am predominately a resistance/support trader. I look for a break of resistance or support and a tech level close enough to help pull the price to it. I do ignore weaker levels. Though I use price action, volume and L2, it is to a lesser degree and sometimes inadvertently ignored.

5)    What models do you use to select information for making a decision to close an open position? What information do you ignore by using these models? Is that information important? I use price is hitting my original stop, hitting my B/E or crossing a new support/resistance level. Any level for partialing or just running out of shares. This method causes me to be price dependent and I ignore volume a lot when I am already in the trade.

6)    What distraction conditions exist for you that might interfere with your ability to use these models. I over stress myself and it makes it too difficult to make decisions since mine are split second since I trade at the open. Keeping a negative attitude so I inadvertently sabotage myself.

7)    Why is greed so deadly to a trader? How do incentives affect your performance as a trader? I have an issue always focusing on the end result. I just don’t want to be stopped out and thus disrupts the clear focus I need to make the quick decisions.

8]    Why might all stress be psychological stress? How might this effect you as a trader? This reminds me of my trip to Hawaii. Wow, I was totally relaxed by the end of the trip, which is amazing for me. The day we were leaving we were running late, hit traffic, took extra time to return the car, the X-ray found something it didn’t like in out onboard luggage. Essentially, we were going to miss our flight. But, I was never the slightest bit stressed. I was just too relaxed. For some reason I was quite confident we would make to our flight somehow. And as they were closing the doors to our flight we just made it. It was my perception and beliefs that made it not stressful. Can you imagine trading like that? The most notable outcome of my stress is lack of patience. Both entering a trade early and taking partial profits too early.

9)    How does your self-esteem affect your ability to perform as a trader? Low self-esteem will make the stop-outs tough and painful. It may be a very well planned and executed trade. But if it is a stop-out the low self-esteem may have me think of it as I was deficient in trading skills.

10) Tasks I need to resolve the issues raised. Reduce worry, decrease external stress and build resistance to the stress. Sleep, exercise and mediation. This past week I was successful increasing my exercise and mediation. I also started using the Headspace app. Started using my slackline a lot. Slacklining is really mindful and a great stress reducer. Still need to improve sleep, not successful yet. Also, need to concentrate on the trade score card. You can still have a great score though you stopped-out. Utilize law of attraction to a point it’s instinctive. As of now I need to make a conscious effort to use it. And give thanks (gratitude) for what went well that day.

Edited August 14, 2019 by Rob C

[Rob C 826]

 

Van Tharp Institute Peak Performance Course

Vol 2: How to control stress

Chapter 6 (part 1)

This is the longest chapter so far with numerous and time consuming exercises. So I have split this chapter into two, since it will take a few more days to finish it.

When you have stress related losses, you have a number of choices open to you:

1)    Ignore the problem. This is equivalent to sitting in a fire.

2)    Minimize the effect that your current stress has on your trading performance. If you must stay in the fire, wear asbestos clothing. Increase your stress protection.

3)    Change your beliefs and attitudes about the stressful event so that it no longer is a problem for you. Thus, put out the fire around you. Have the belief that it is OK to lose. This is the simplest and hardest to implement.

4)    The most obvious choice is to avoid situations that tend to be stressful for you. Try to get out of the fire. Stop trading, go back to SIM.

5)    Reduce your risk exposure. Reduce your fixed R. Reduce your leverage and account size. Reduce number of trades. Have a brokerage lock your account on max loss.

To get out of the fire you must determine where is the fire. I sadly scored high on every category in my life stress inventory test. So I can’t say it’s my job or health that is causing the fire. I need to address all the categories. Though job-related and family-life stress are the least of them.

This chapter has quite a few exercises. First. Write down my top 5 stressors based on the LSI test (most to least, based on the test).

1)    Financial

2)    Health

3)    Personal

4)    Job Stress

5)    Family-Life

Then it asks for three possible actions that will alleviate the top stress. For me that’s financial. For some reason, the last 20 years, I have always worked in an environment that continuously had a threat of layoffs. I did experience a whole division closure in the middle of those 20 years and immediately found a job with no interim. But this lack of security has always been a stressor. My three actions to try and alleviate the stress:

1)    Learn to day trade

2)    Online school to add to my skills

3)    Find another job with more security

I chose to learn how to day trade as my solution. Little did I know it would add (hopefully only temporarily) to my stress. So I had been working on this stressor for some time.

 

My 2^nd worse stressor is Health. My actions to relieve stress:

1)    Must increase sleep. 5.5 hours a night for years doesn’t cut it. Will need to rearrange family schedule.

2)    Increase exercise

3)    Increase mediation – I just signed up for MindSpace app.

My lack of sleep has been my number one stressor in my life for many years. Ever since my daughter was born with extreme sleep issues. The amount and quality of my sleep has improved over the years. But I still have about 1.5 hours deprivation every night. This causes chronic fatigue, drop in metal abilities and chronic dizzy spells. I try to squeeze sleep in without effecting my family. I see know it’s not a selfish thing to ask for and I will start to update my family daily schedule this week.

 

My 3^rd worse stressor is Personal. My actions to relieve stress:

1)    Improve attitude. Why always negative? Why worry about everything?

2)    Don’t always feel responsible for everything

3)    Organize life. Don’t live from fire to fire.

I already started on my negativity and its working out quite well.

 

My 4th worse stressor is Job Stress. My actions to relieve stress:

1)    Work schedule change to spend more time with my family

2)    Complete headache project

3)    Stick to 5 days a week

My schedule is about to change for the better (discussed more below). The headache project I have been dealing with this paste year is finally making progress. Being onsite at work 7 days a week really takes its toll. Need to cut that down.

 

My 5th worse stressor is Family-Life. My actions to relieve stress:

1)    Work schedule change to spend more time with my family

2)    Better time management at home

3)    Help spouse improve her health

My work schedule has been an ongoing stressor with my family and me for 5 years. I was fine working the weekend schedule as long as it was promised only for 5 years. That was 5 years ago. Actually my manager has really tried to get a schedule change for me during those years. The good news I will finally have a free Sunday with my family starting this autumn. So I hope that will reduce the stressor substantially.

Getting to sleep on time has been a stressor for at least 10 years. My family has made some efforts improving it but it is still far from what I need. Looks like I will have to take it the rest of the way with time management. Definitely starting with earlier dinners. My family prefers very late ones.

My wife’s health has deteriorated recently. Though I was helping whenever I can I have to step this up as well.

 

Then the course asks to make resolutions of these changes. I have actually started a few of them before I started to take the course. The one I will start today is promising we will be eating as a family on time tonight. Even if I have to get take-out to do it.

Winners are people with a clear purpose in life and a clear plan for getting there. The goals you set for yourself should be reachable, but lofty enough to seem worthy of attainment.

 

The course now asks you to write down your goals.

5 year goals:

1)    Have a bond with my children that will carry us through their teenage years

2)    Make sure my children are enjoying their lives

3)    Help in ensure my kids have at least one hobby and one sport they enjoy

4)    Improve trading skills that it could replace my primary income in 5 years

5)    Be in good health

1 year goal

1)    Spend lots of time with kids. I am aiming for 50 days, devoted for them, in the next year.

2)    I want to be consistently profitable as a trader by end of 2020.

3)    I want to be in fit by next year VO2Max of 52 or higher

4)    I want my sleep not to be an issue. Consistent 7 hours or more.

5)    I want a dog

60 Day goals

1)    Improve sleep >6 hours a night

2)    Improve health VO2Max >48

3)    I want to have a second successful setup in my playbook

4)    I want to finish the Van Tharp course (~90 days)

5)    Take another trip with my family

 

Then the course ask you to write 5 goals if you knew you were going to die of natural causes in 1 year.

1)    Get my life/property/finances in order so my family doesn’t have to deal with it later.

2)    Write letters for my family to read when I am gone.

3)    At least 4 big vacations with the family

4)    Have some alone time with each family member at least once a day

5)    Find peace

 

Then the course ask to specify 5 “special” goals with an ECD.

1)    By end of September get a consistent 6.5 hours a sleep a night (with a min of 3.5 hours of deep sleep).

2)    By October 15 achieve a VO2 Max of 48

3)    Improve trading score card monthly average, every month to the end 2019.

4)    Spend 20 full days with family by EOY

5)    Finish the Van Tharp Course by before Thanksgiving holidays.

 

 

 

Edited August 17, 2019 by Rob C

[Rob C 826]

Van Tharp Institute Peak Performance Course

Vol 2: How to control stress

Chapter 6 (part 2)

The planning board for my goals took awhile, so I had to split the postings of this chapter into two parts.

  

[Aiman 86]

Thanks for keeping this post alive!

[Rob C 826]

 

Van Tharp Institute Peak Performance Course for Traders

Vol 2: How to control stress

Chapter 7

So another option, when you are sitting in a fire, is to wear asbestos. Thus, increase your stress protection. The SPI test taken earlier quantified the level of stress protection in each of the area.

1)    Health and Nutrition

2)    Exercise

3)    Recreation

4)    Mental Relaxation

5)    Learning to perform under stress

 

21 things the course recommends you can do to move toward peak performance health.

1)    Daily journal everything you consume. I did this two years ago with a fitness app.

2)    Develop a plan to improve your diet. I also did this 2 years ago when I was tracking my food.

3)    Begin each day with a breakfast of organic oatmeal. I have researched and experimented a lot on the best breakfast for me. Oatmeal was good but intermittent fasting was better. And even better was a late small breakfast of only bone broth. Since it contains no carbs it doesn’t interrupt the fast too much and still starts the day with a slow digesting food. Plus, it’s a good time to get your daily collagen.

4)    Drink 64oz of water a day. I do.

5)    Don’t drink anything when you eat your food. I didn’t know about this one, but it makes sense that you are diluting your stomach acid when you are trying to digest your food. So I just started this week of drinking 30min before the meal and 90min after. It has been tough so far but I will get use to it.

6)    Give up all vegetable oils. I do use cold pressed avocado, olive and coconut oils. Mostly avocado. From what I have read this should be healthy.

7)    Give up all wheat based products. I tried a gluten free diet a couple of years back for two weeks. I always thought this was a fad diet so I never tried it before. I didn’t notice any difference except the unexpected side effect of my acne disappeared. I tried it for another two weeks with the same results. So I have been gluten and acne free for 2 years.

😎    Avoid all dairy foods except Kefir and an occasional piece of cheese. Cheese is my favorite food. Though a couple years ago I switched to eating only raw, aged cheese from 100% grass fed cows. I just tried reducing my cheese consumption by 70% this week, it’s going OK.

9)    Avoid excitotoxins and preservatives. I do eat some sugar substitutes once or twice a month when I bake. Though the ones I use I thought does not fall under as an excitotoxin. But I will double check.

10) Avoid all antibiotics if at all possible. Sadly my life has been filled with countless prescriptions of antibiotics. I trusted doctors a bit too much and never question a prescription. I even had one doctor prescribe a continuous dose of antibiotics for acne. Finally after a year, after I was growing moles due to sun sensitivity, I decided I preferred the acne. Doctors seem to be more cautious now and currently I try to ride out the sickness before heading to the med center. But, I have noticed I don’t get sick as often with my new diet so it’s not much of a concern.

11) Give up alcohol. No problem I don’t drink.

12) Give up all caffeine substances. I started reducing this last week. I am down to 2 coffees, one soda and one tea per day. Yes, that is after I cut down. I plan to be down to one coffee and one tea in 30 days, then I will go from there.

13) Give up all tobacco products. No problem, never did, never will.

14) Give up all recreational drug use. Again, never did, never will.

15) Give up sugar. I’m on a low carb diet, so I already gave up sugar some time ago.

16) Only grains you should consume are oats, millet, wild rice and quinoa. Actually, the only grain I eat is wild rice and not very often.

17) Eat organic. I do.

18) Take a high quality vitamin. Took some time to find a good one (stay away from Centrum). But I have and I take them regularly.

19) When you cook your food, avoid frying or baking in an oven or microwaving. Instead steam or pressure cook. They didn’t mention why. But I assume two fold. Breaking down of molecules, especially oils and creating carcinogens on meat. I do only cook using avocado oil which is stable to 500F. And I try to steam my veggies. I am also cautious not to over cook meat. I think this is enough.

20) Avoid combining food as much as possible. This is new to me. I need to research this. They recommend the book Fit for Life which explains this. The problem is I looked it up and there are many books with that title.

21) The less food you eat the better. Yes, the data for this has been validated for some time. I have always struggled with this. That is why the intermittent fasting has helped me. But I will focus on this more.

 

Edited August 22, 2019 by Rob C

[Rob C 826]

Van Tharp Institute Peak Performance Course for Traders

Vol 2: How to control stress

Chapter 8

This statement (if one can say it’s true) is a good predictor of trading success:

Each week I spend 4 hours exercising.

 

Fit people are more successful on average since they have more protection against the stress of trading. And they are less likely to be disturbed by a loss and have higher tolerance for long periods of mental stress.

1)    Exercise is a way of burning off the stress-related byproducts and minimizes the need for a fight/flight response.

2)    Exercise releases endorphins

3)    Exercise increases one’s resistance to disease

4)    Helps you relax

5)    Serves as a form of mental release and helps improve a person’s self-image.

 

Aerobic exercise raises the rate at which your body will convert glycogen to glucose.

The air contains 21% oxygen. An average person exhales air that contains 19% oxygen. A fit person exhales 17% oxygen, indicating the increased efficiency of the lungs.

A fit person may have up to 60% more red blood cells than an unfit person.

 

The rest of the chapter was describing methodology of exercising. I am reasonably comfortable on that subject so I am not recording any notes.

I will reiterate my exercise goal. I will By October 15 achieve a VO2 Max of 48. This was my fitness level only 10 weeks ago. I am currently at 44. My VO2 MAX was 51 last September, though I do not have a time line to reach that yet, though I am thinking of next May as goal to re-achieve that fitness level.

 

 

Chapter 9

The previous two chapters discussed two ways for effective stress protection. Some other ways are: recreation, mental relaxation and learning to perform automatically under high stress conditions through mental rehearsal.

The course recommends spending 2 hours a day or one whole day a week on recreation. That amount of time is almost mind boggling for me. I always feel like I have something I need to do. This week I have tried to relax more. Last night I spent 20 minutes reading to my kids. And next month my schedule changes and I get Sundays off. I will try to make that day a family day and not fixing things around the house day.

The course recommends traders taking 2 weeks off for vacation every six months. This will also be a tough one for me. Besides not having the available time, vacations are quite stressful for me. I am essentially the tour director for our family vacations. And my family does not like to lounge around. They want to be on the go all the time. After a vacation is over I always say the same thing, “thank goodness I am back at work so I can rest.”

Relaxation is a form of self-control and is a skill you need to practice (course includes a relaxation CD). They recommend listening to the CD twice a day. I have not listened to it yet. They don’t recommend listening to it while driving (may cause drowsiness) so I need to work it into my day. They recommend using it for 2-4 weeks until the technique is memorized.

Practice successful behaviors so often that they become natural and can be performed even under stress when you feel mentally out of control.

Self-sabotage “You get exactly what you want out of life.” You are stressed because, at some level, you want to be stressed.

The question is asked, “if you owned a million dollar race horse, would you give it coffee to wake up in the morning? Not give it enough sleep? Give it poorly balanced meals? Not exercise it enough?” Of course not. So why do we do that to our billion dollar bodies?

 

Chapter 10

Each person experiences life differently because each person’s thinking is unique. We have our own automatic way of talking to ourselves. Psychologists call this self-talk. Self-talk can be supportive, but it can also be venomous and self-deprecating (like worry).

Self-talk can be illogical like, “why me?” But, it still has a large impact.

If you are a worrier, it is due to your self-talk. Worriers anticipate the worst in any situation.

First you must understand your stress. Where does it originate? What do you rationalize? How does it affect you? So they recommend keeping a stress diary. Then rate your self using a scale called a Subjective Units of Distress Scale (SUDS). Zero is at peace and worse case stress is a 7. Keep the diary and stress scale for 2 weeks (at least). You probably spend many hours charting the markets, why not your stress? They ask you to plot the SUDS versus results of your trading for results for 6 months. Coincidentally I was doing this but with a simple -1, 0, +1 scale (see my weekly summary posted 8/25/19 in the trading journal forums). When I tried to correlate it to trading results I saw little correlation. But now they ask you to give yourself a SUDS rating at the moment of the trading decision. Then after 30 trades look for patterns. Is the opening of a trade more stressful than closing one? Are you less stressed on successful trades? Was the stress from trading or something outside of trading?

So they recommend 3 exercises:

1)    Reliving a past emotional experience related to trading

a.    What was the situation?

b.    What were your thoughts?

c.     When you feel emotional from the memory, what self-talk do you hear?

d.    Did your emotion fit the experience?

e.    Can you interpret the situation in a positive light?

2)    Keeping a stress dairy

3)    Charting stress

So I will start a stress diary for each trade. I don’t think I will post it, though I will post the final chart of stress versus trade outcome.

But I will try the first exercise now: reliving a stressful trade.

This was a recent trade (last week). My first live trade of the day went well and was a small win. Though it didn’t make much it had a good score card. So I was switching to SIM and then I thought, “I am negative for the month I need to trade more.” I really didn’t want to but I forced myself to trade more. I wasn’t thinking about only the process anymore. I did find a B setup. Which means I will probably get a poor score card. When I was just about to take the trade I balked to double check the Y-scale which looked odd. I determined my stop and share size was find but the price had moved beyond an acceptable entry point by then. So I should have stopped the entry but momentum took control and I entered the trade. I realized it was a terrible trade the moment I took it and thus I am supposed to get out. I usually find this difficult and to make things worse the price went against me the moment I took the trade. But, I thought the price already fell and is close to the S/O I might as well test it and was stopped out.

Self-talk:

1)    Keep trading, you are behind this month.

2)    There is an “OK” setup you need to take it. You were positive last month (for the first time) you need to keep that.

3)    Am I choosing the right number of shares? I am not use to this stock, did I read the Y-scale correctly? I have read that wrong before.

4)    I just took a horrible trade I should get out. But then I ruin the day and I will be wrong.

5)    Had to stop out, made a good day bad. It will be a bad score card.

6)    This will be embarrassing to post this trade on the forum.

7)    Does this trade show how poor of a trader I am and the few winning trades I have had are really to a fluke that stocks like AAPL and FB are temporarily easy to scalp at the open. This setup may disappear at any moment.

8]    It’s easier to scalp then to make real trade setups which I have not been able to do yet.

9)    And as usual I think is this the trade that starts the avalanche of bad trades to my inevitable road to quitting?

I waited a day to be distant from the memory so I can write on interpreting the situation in a positive light.

The trade described above and some others made me to finally decide to remove my P/L window permanently from my platform. I will look at my balance at the end of the month, that’s all. It’s all about trading your setups and getting a solid score card. Trades like above is the push I need to go in the right direction.

Intellectually I can’t imagine that trading 6 months in a row, without losing money is luck. There must be some skill accumulated by now. That is just silly to think I am on a lucky streak or a funny anomaly in the market. Yes, the lack of profitability definitely impacts me and will cause my confidence to wither. But let’s be real about this.

 

 

Edited August 27, 2019 by Rob C

[Rob C 826]

Van Tharp Institute Peak Performance Course for Traders

Vol 3: How to Control Losing Attitudes

Chapter 1

The writer of the course believes that there are certain characteristics essential for trading success:

1)    A strong mathematical ability

2)    Gamesmanship

3)    The ability to focus on the big picture as opposed to all the detail

4)    Making decisions based on logic rather than feelings

5)    The ability to be organized and see things through to the end as opposed to the tendency to get totally absorbed in something until something else grabs your attention.

6)    The ability to commit to being a trader

7)    The ability to totally recognize how you create your own results as a trader.

You never trade the markets directly. You trade your beliefs about the markets.

If one person can do something, any other person is also capable of doing it, although it will be easier for some.

 

Chapter 2

The course asks you to take an online test to try and determine what type of trader you are.

https://www.vantharp.com/trading/free-resources/

The test describes me a Strategic Thinker. The three core qualities of this type:

1)    The ability to see the big picture, new possibilities and connections between things

2)    Making decisions based on logic and analysis

3)    Being decisive, orderly and doing things sequentially

The strengths:

1)    Originality and follow through

2)    Quickly see patterns and ability to rapidly hypothesize

Challenges:

1)    You may be so logical that you don’t recognize when emotions are causing you to be self-destructive.

2)    You have a strong desire to be right.

3)    You may not honor your stops

Wow the challenges for this type are really dead on.

 

There are a few models for why traders lose in the market.

The Hydraulic Model describes traders that are driven to lose in the market because of negative subconscious forces. Freud describes these forces like water against a dam and can break through any weak points and produce irrational behavior. People lose money when their defenses weaken, break down and when they direct the forces inappropriately. The author thinks this model doesn’t work in practice. But I think this is very valid when describing a trader going Tilt/Hulk.

Behavior Theory approaches the market in terms of effectiveness of how the trader is rewarded or punished interacting with the market. Superstitions can be created from previous rewards. Frustrations produce rigid behavior. Once you become aware of your behavior one can begin to determine how to control it. That is why adding the psychology to your trading journal.

The Trader as a Servo-Mechanism (like a thermostat) who tries to keep him/herself in the comfort zone. The most important Servo-Mechanism as a trade is your self-image. You have a comfort zone with respect to yourself and your behavior tends to act to maintain this comfort zone. Your self-image sets boundaries for you. If you think you are an average trader and you go on a winning streak, your self-image will have you start to lose so you can again become an average trader. If you keep telling yourself you are an excellent trader, you boundaries will start to expand allowing the better trading to occur.

Self-Sabotage models:

1)    The faulty programming model (matrix model).

2)    The unwilling to experience feelings model.

3)    The unwilling to experience my creations model (broader).

4)    The oneness model of self-sabotage. This is the most advanced and, for most people, the hardest to work from because according to this model most of how we operate is self-sabotage.

Recommendations:

1)    Find similar traders to you that have already overcome the difficulties you are having now. Learn how they used them as a springboard to success.

2)    If you give yourself a label, use that as an opportunity to overcome your challenges rather than as an opportunity to avoid taking responsibility for your trading.

3)    Keep a regular journal how you respond to the environment. This will enable  you to spot consistent mistakes in your trading and correct them.

4)    Divide your goals into parts and reward yourself for the completion of each part.

5)    Negative info that you feed yourself results in feelings of unhappiness and failure. Positive info results in the motivation to accomplish your goals.

 

 

 

[Rob C 826]

Van Tharp Institute Peak Performance Course for Traders

Vol 3: How to Control Losing Attitudes

Chapter 3

A monster chapter. Huge exercises. It took me almost two weeks to finish half the chapter.

The course asks for you to start writing a psychological diary. Which should include the following information:

1)    What was the trade: Bought/Sold – Opening/Closing

2)    Specific info about the trade

3)    % of your capital invested

4)    Was it on margin

5)    What kind of leverage was used.

6)    Record the reasons you took the trade

7)    What were your thoughts when you opened the trade?  Self-talk? Feelings (mental/physical)?

8]    What technical factor were there to support your decision?

9)    How does the trade fit into your goals for the week/month/year?

10) Are you currently experiencing anything emotional outside of the markets?

11) For opening trades, comment and rate on your expectations.

12) For closing trades comment on how you gained or lost money. Did you follow your system?

13) What was your reaction to the win or loss

14) Why did you make the trade? How did you know it was a good risk?

The course asks you to take a DT test. I will not place my answers here, because the evaluation will be in the next chapter. So I will list it there.

Then the course asks to lists what money means to you. Then make a list what people commonly tell you about money. Though the discussion of this exercise will be discussed in chapter 8 I have the list I created below:

Money

Self worth

Providing for my family

A limiter for my goals

Something that removes my focus on the things that matter

Something I work for that removes time that I could be spending with my family

Security

Stress

A barrier to the life I wish I had

Intrigue

Fascination

An insight how the world works

What other people often tell you about money

Defines success

Separates the halves from the halve nots

Root of all evil

It's only money

Can never have enough

You must have money to make money

Don't throw money out the window   Then you are asked to take a Values Self-Test. First list 3 things you look for when you buy a car (my list below):

1)    Do I like the look of it? 2)    Is it the correct size for its intended use? 3)    Reliability   Then asked to list your three most important goals in life (my list below):

1)    Give my family a better life 2)    Have a useful life 3)    Don’t waste time   Then finally asked to list what you would look for in a dog:

1)    Is that breed cute 2)    Do you like the dog’s personality 3)    Is that breed trainable   Luckily I didn’t read ahead so I didn’t know how this was scored. But you give all comments that were positive a +1 and negative a -1 and sum them up. Surprisingly I was positive. With that info you will analyze the next 3 exercises differently   Next is the start of the first monster exercise. First, you list 10 things that are essential in your life. This was already concerning since after I listed them I saw I clearly did not have most of them. Then you order them in priority. Then for each thing on your list you list 10 things explaining what you value about that essential need. So you end up with 100 words/phrases. Then you prioritize each under each category to have a prioritized list of a 100 values. Then for each of the 100 values you answer, “when do you know you have it and when do you know you don’t.” So you end up with 300 phrases. This took quite a bit of time and that is all I finished in the chapter so far. Next I will work on the 300 phrases of things that are essential to avoid in your life. Then you take the two lists and compare them. Actually that’s when things get interesting. But so far I have only finished the first list, which is below. I hope it looks as time consuming as it was.   Value How do you know when you have…? How do you know when you DON'T have…? Family     Love Feel alive Void Spending time with them Feel the bond You feel the bond with them slipping Watch them grow Catch the milestones Miss the milestones Happiness Look forward to the day Dread the day Make your child laugh everyday Best sound in the world I can tell there was something missing that day Trust Run to me when they are upset Avoid me Vacations Immediate increase in bond Burn out Reading to kids They look forward to it If you haven't read to them in awhile its awkward Traveling The kids talk about for months afterwards They will ask for it everyday Help kids with homework They are less stressed about school work They are stressed since they feel like they are on their own Adequate Sleep     Safety for other drivers Stay alert while driving Risk of falling asleep while driving Safety for my passengers Stay alert while driving Risk of falling asleep while driving Safety for myself Stay alert while driving Risk of falling asleep while driving Memory strength Surprise people with my memory Forgot why I walked into that room Work effectively Stay ahead of the game Seems like there are not enough hours in the day Keep up with the kids They tire first I tire first Don't fall asleep while standing - I hate that I don't dose off during the day Fall asleep anywhere Prevent dizzy spells No dizzy spells Almost faint during the day Strength to exercise more Exercise more than 3 times a week Unable to exercise It would be nice to yawn again. You body turns that off during long extreme periods of sleep deprivation. I haven't yawned in 10 years Yawn like a regular person Forgot what it was like to yawn Money     provide for family They go without wanting Cutting expenses Sustenance Pay the bills Loss of basic necessities Better secondary education for my kids Kids happy with their school Not happy, poor scores compared to national level Intrigue Enjoy learning about the financials Not even knowing the Nasdaq current level Need Have the materials to function Don't have the basics, effects work Financial freedom Able to pursue more interesting work Work for a paycheck self-worth Feel good about yourself Feel the stress of not providing as much as you should College fund Staying with the needed savings plan Worried how we will pay for it. Limiting my kids choices Success Created more than enough income Not even following the right path to succeed Fascination with markets Eager to trade in the morning Dread trading Career     Livelihood Job more than a paycheck Just a paycheck Life Goals "Never work a day in your life" Job inspires no goals Challenging Creates interest to learn and adapt Robotic Fulfilling Job fills at least one goal Job does not fulfill any goal Responsibility People trust that you will complete the task Checks needed for you Role model for my children You inspire them to do something they love A job is just money Team player No one has to fight for credit Free for all Make use of education PhD = Doctor of Philosophy PhD = Pizza Hut Delivery Part of something big More like a quest Just see the day to day grind Pride Proud to say what you do Refer to yourself generically as an "engineer" Sense of importance     Feeling needed People depend on you every day Your not missed Trusted Answers/tasks are accepted without question Always questioning you Valued Fell irreplaceable Easily replaced Missed They feel glad when you returned They had not noticed you were gone for a few days Respected Your opinion matters Your thoughts are not worth anything Self Esteem You simply feel good about yourself You feel like a disappointment Achievement Something recent that you are proud of If you have to go back far in time to your last achievement Make a contribution Feel that others benefit from your help Doesn't matter if you were there or not Knowledgeable They seek out to answer questions Your opinion does not matter Helpful They expect that you will offer help and are grateful   Intellect     Creative Positive responses for your "new" ideas Rehashing old ideas Continually improve The world opens to you Same old, same old Read Every day (audio books) <4 a week feels like I am no longer reading Learn new Learn something new everyday Can't remember the last thing learned review old Almost always recall useful info Always unable to find useful info not recently learned Increase understanding Instinctively always want to know the "why" Learn enough to finish the project New skills If you are struggling, you are learning something new Everything is too easy Learn Day Trading Improving each month Stagnating Stay with new tech You find yourself teaching other on the new tech You see others using new tech and you have no idea how to use it Keep a good memory Surprise people with my memory Forgot why I walked into that room Exercise     De-stressor Tolerance for stress is high Easily set off Hobby Working out is fun Hitting the gym is a chore Keep fit You can feel fit You can feel out of shape Improve sleep Deep sleep more than half the night Light sleeping only Improve mood High tolerance Short fuse The great Outdoors The reason I moved to California What a waste moving to California Time to myself Then like to spend the rest of the day with people Feel claustrophobic Push myself Proud of the workout Felt like I wimped out Time in the sun Good day sunshine Vampire I want to climb Mt. Whitney Ready for Whitney in 2021 Will I ever be ready for Whitney Peace     Calm Zen On the edge of a mood swing Mediation The skill is getting easier Not seeing any progress Contentment Living a worthy life Going to die with lots of regrets Quiet Hear the roosters and cows Hear only shouts Time for myself Take the short way home Take the long way home Interim between stressful events Back to norm before the next event Fires keep building on each other Music Listening to my daughter play piano The day just doesn't seem as harmonic Walks Listening to books or bonding with my son The bond with my son seems to drift Pets Unconditional love Like something is missing Sleeping child Nothing more peaceful I miss not seeing them sleeping in the mornings

 

 

 

Edited September 12, 2019 by Rob C

[Rob C 826]

Van Tharp Institute Peak Performance Course for Traders

While I am trying to finish the monster chapter 3 in this course (looks like this chapter may take me a month) I will give an update on my goals.

In a previous chapter the course asks you to sent up some short term goals with an ECD. Here are the goals and progress.

1)    By end of September get a consistent 6.5 hours a sleep a night (with a min of 3.5 hours of deep sleep). Last week I obtained 6.35 hours average with 3.2 hrs of deep sleep.

2)    By October 15 achieve a VO2 Max of 48. My VO2 Max was 44 at the time I set the goal and for the last week I hit a VO2 Max of 46.

3)    Improve trading score card monthly average, every month to the end 2019. So far so good, but it has been a close one.

4)    Spend 20 full days with family by EOY. So far I have spent 3 since the time this goal was set. But that is actually a lot for me and I am on route to accomplish the goal.

5)    Finish the Van Tharp Course by before Thanksgiving holidays. I thought this was attainable until I hit one chapter that will take me a month. Now I am not so sure.

[Rob C 826]

Van Tharp Institute Peak Performance Course for Traders

Vol 3: How to Control Losing Attitudes

Chapter 3

A monster chapter. Huge exercises. I have been working on this chapter for almost a month and still not finished. I did just complete another exercise so I will post it now.

The idea of this you list 10 things that you try to avoid in your life. Then you order them in priority. Then for each item on your list you list 10 things explaining what you value about that essential need. So you end up with 100 words/phrases. Then you prioritize each under each category to have a prioritized list of a 100 values. Then for each of the 100 values you answer, “when do you know you have it and when do you know you don’t.” So you end up with 300 phrases. This took quite a bit of time.

 

Value to be avoided	How do you know when you have…?	How do you know when you DON'T have…?
Missing my kids grow up
Spending only 15 days/year with them	Little to no bond	My kids will spontaneously hold my hand
Every night I regret not spending more time with them that day	Go to sleep with regret	Fall asleep quickly
I will finally have time, when they are too old to care	They prefer spending time with their friends	They go out of their way to spend time with you
Realize it is too late to build the bond you wanted with your children	You try to bond with them but there is no foundation	The bond builds
Having to say no when they ask for you to spend time with them	Feel the guilt	They still ask, knowing there is a possibility you will say yes
Missing milestones	You see the milestones only on video	You are the one recording it
They prefer playing video games than spending time with you	You only see your kids behind an I-Pad or computer screen	They stop playing computer games to say hello to you when you come home
You lose touch of what their favorite things are	They surprise you when you think you are buying something they like	You know what they would like
They suddenly look taller	Self explanatory	You know what roller coasters they can ride on
They suddenly stop calling you daddy	You become dad	There is still a loving charm in their voice when they call you daddy
Sleep deprivation
Unsafe to drive	Fall a sleep at the wheel at least once a week	Chance of falling a sleep while driving never an issue
No energy	Very difficult to complete any task	Even have strength to exercise
No focus	Hours go by and you didn't accomplish anything	Feel like you accomplished a lot by the end of the day
Dizzy spells	Have to grab on to things especially after standing up	I can safely help tie my kids shoes
Catch colds easily	If anyone in my family has a cold I have it a couple of days later	I can safely take care of my sick family member without much concern
Procrastinate	Difficulty starting the task	Completing my to do list
Always irritable	Family keeps their distance	Able stay clear and calm
Way too much caffeine	4 double expressos, to keep going, is common	< 3 standard coffee/teas a day
Acid reflux from too much coffee	Need tums or food to reduce reflux, though I am not hungry	Not a concern
Fall asleep while standing	You never know when or where you may dose off	Not worried about falling a sleep during a meeting
Stress
Dread each day	Don't want to get out of bed	Spring out of bed in the morning
Unable to focus	Only think about what worries you	You can focus on the task at hand
Keeps you up at night	Wide awake at 3am even though your exhausted	Fall asleep immediately
Simple issues now look big	Always worried about something	Take life as it comes
Want to ignore difficult tasks/issues	Everything seems unsurmountable	Able to approach tasks
Inability to trade due to nerves	Take poor setups. Don't let winners run.	Patiently wait for setups
Always feel on guard	Can not relax	Feel safe
Heart pounds	Heart pounds to a point you are scared of your health	Breathing exercises is enough to clam yourself down
Different stresses are cumulative	Things add up during the day until a limit is reach, where you just shut down	Able to keep the stresses separate and in check
Hear turns gray	Its amazing, during stressful times, how fast your hair turns gray	Gray with age
Void of goals
Nothing to wake up for	Not easy to get before dawn for work	Spring out of bed in the morning
Difficult to find a meaning in life	You look but you can't find one	You know your role in this life
Not a good role model for kids	Scares me they might stop dreaming of the future	They tell me often what they want to do with their lives
Difficult to plan the rest of your life	You don't see the light at the end of the tunnel	You know your plan
No motivation	All tasks become difficult	Able to get yourself going
No meaning	You question why you do anything	You know why you do everything
The days have no distinction	All days become a blur	Everyday has a distinct meaning and memory
Forget things easier	When things have little meaning they are forgotten faster	More meaning more remembrance
Difficult to be happy	happy moments are brought down, because you ask why for everything	You can live in the moment
No path, no direction, meander	Difficult to make decisions when you have no directions	Decisions become easier
Unemployment
Panic that you will never find another job, at least at that level	You feel you and your knowledge is too old	You get calls from head-hunters very few months
Feel worthless	All your other accomplishments no longer seem significant	You know and can list your accomplishments
You start thinking about just getting a paycheck instead of a career	You don't care about accomplishments anymore	You get your projects done
Feel regret that you did something wrong to get laid off, even though thousands did with you	Can actually list reasons why, even though they are likely not a factor	No regrets, you move on with the opportunities awaiting
Question you career path	Wonder why you spent all those years in grad school and this job	You know it is a temporary directional change
Question the worth of your education	You could have been in the same situation without working so hold in school	You never forget the positive changes education has done to you
Lack of respect	Feel like a loser	You always respect yourself
Avoid conversations with people you haven't seen of awhile	You plan your day around avoiding people	Actively approach people
Life goes on hold	Mental block to plan any future event	You don't defer your plans
Even when you have steady employment, once laid off you always think you can be again.	Never think you have job security	Create a plan B and always have it in your pocket
Unfit
Always tired	By noon you are just planning when you can get to sleep	Never slow down during the day
No stress relief	Stress builds	Working out reduces stress efficiently
Poor focus	The day seems to pass by without getting much done	Getting stuff done
Can not keep up with my kids	You start to watch them and not participate	You run them into the ground!!
Chronic pains arise	Seems every day a new pain	A pain once in awhile but its easily walked off
Unable to day trade	You lack it all the focus, the stress, the discipline and the patience.	Boy does it help.
Feel old	I always feel 10 years older when I am not fit	I don't think about my age much
Get injured easier	I just walk down the stairs and by the last step something hurts	Go running, hiking, or lift and it is not a concern
Lack of a hobby	there is a void in your life without a hobby	It great that exercise can double as a hobby
Headaches	They always start about two weeks without a good workout	I can go years without a headache when I am fit
Loss of memory
Work less efficient	Always need to look back on what you were doing	You have an outline in your head that you can easily follow
You can feel it is getting worse	Less work done each day	Can see improvement with normal daily activities
Forgetting memories of your children when they were young	See an old picture and can no longer remember the event	Don't need to see pictures since you can recall the event clearly
Thinking you peaked some time ago and now just falling	You haven't accomplished what you wanted in life and now it is too late	Your making progress and there is still time
You extrapolate the worsening of the memory loss and think you will be useless by 65	You can't imagine providing for your family in a few years	Will be working until at least 70. NP
Difficulties trying to prevent it	You try the gimmicks and nothing works	Just the usual healthy living and you see it improve
Need to look up things I use to recall	Seems like that's all I do all day is look things up	I can just recall them. Very efficient
Can't remember why I walked into a room	I hate that, it is a constant reminder that you are losing your memory	You definitely notice when you stop doing it
You work with people who had a much worse memory than yours and now theirs is better	Nothing hits you more when you see this	You are the one in the meeting tat has the info at your finger tips
Hopes of getting another degree fade	I love learning. It hits you hard when you think you are no longer able	Still plan to go back one day for more learning
Anger
You feel immature	Nothing brings out the immature child in you	You pause with adult like control
Regret any action under the influence of anger	Once I calm down I am so regretful of losing my temper	It helps control my anger knowing I will regret it
Don't act like yourself	Its amazing who you become when you are angry	Stay yourself
Lose control	You become unpredictable	You control and determine logically what the next step is
My children are learning to have a short fuse	It is awful to see them copy bad behaviors	I make an effort to show how to deal with emotionally stressful times
Get other's angry	It is contagious	I rather put out the fire than spread it
Makes the world look last inviting	You think anything will set you off	The rest of the world is unrelated to your issues
It gets worse if not managed	It builds until anything will set you off	It is managed, forgiven and you move on
You forget what even got you angry	The anger lasts longer than the issue it self	The anger dissipates quickly
Hold grudges for a long time	I can hold a grudge for the rest of my life	Forgive and move on
Financial Worries
Difficult to plan your family's future	You feel guilty planning anything	Always planning and setting goals
Huge stress factor	You find your heart pounding and stomach growling for no reason	You have other things to think about
When its bad it dominates all thoughts.	You can have this stress on the front of your mind all day	You don't think of it
Disappointment as the primary family provider	It doesn't get much worse than that	You feel that you are providing well for your family
Money is leaving your accounts faster than it arrives	You see it every month when you pay the bills	There is financial stability
All expenses are now under scrutiny	The littlest thing now has to be a decision if to spend or not	You don't sweat the little purchases
Savings for college fund and retirement stop	You start thinking pay check to pay check	You save and invest
Your children don't understand when their friends go on extravagate vacations and they don't	It hurts	They have enough vacations they are not bothered by them
People start to think you are driving that classic car to be cool. And not because you can't afford a new one	You don't correct them	You buy a new car
At its worse it seems like everyone you know is buying a new car or house.	You seem to notice those things now	It is not more common than usual
Messy Life
Unorganized	Don't even seem to have the materials to get organized	Folders, binders, calendars, cabinets, etc. are all available
Finishing things at the last minute	Its difficult to start when you  know the first thing you need to do is find stuff	The things you need to start are handy
Messy house	Messy hours equals messy life	Clean house means clean life
Postponing tasks	Don't want to start working in this mess	Start tasks promptly. Have a daily task lists created
Not easy to find something	At least 20% of the task is looking	Not a factor in the task
Inaccurate personal calendar	Can no longer trust the calendar	Can't live without the calendar
Need to be reminded about appointments	No calendar, no schedule	I usually remind others
Delaying doctor's appointments	Just another thing to add to the list	They are important
Not Feng shui	Yikes! You can feel the energy sucked away from you trying to walk through the house	The house provides energy
Overdue library books	That goes without saying	Always check what is due

[Rob C 826]

Van Tharp Institute Peak Performance Course for Traders

Vol 3: How to Control Losing Attitudes

Chapter 3

Finally finished this monster chapter. Huge exercises. The course said it will take up to several weeks to finish the chapter. It left me a little unsatisfied because the whole chapter is really taking tests and created huge lists, but the analysis will come later. So I am not sure why I did all this work yet.

The last part of this chapter that needed to be completed was to combine and prioritize the two previous value lists into a 200 long list. Then there were two tests, which will be evaluated later, so I won’t mention them yet. Finally another list of what trading means to you which will also be analyzed later.

So here is the combined value list. The essential to have and what you must avoid in one list. It is interesting the list gets very “block” like the bottom half. As a whole category of values will be less important than another.

Value	How do you know when you have…?	How do you know when you DON'T have…?
Love	Feel alive	Void
Spending only 15 days/year with my family	Little to no bond	My kids will spontaneously hold my hand
Every night I regret not spending more time with my kids that day	Go to sleep with regret	Fall asleep quickly
Spending time with my family	Feel the bond	You feel the bond with them slipping
Watch my kids grow	Catch the milestones	Miss the milestones
Happiness	Look forward to the day	Dread the day
Make your child laugh everyday	Best sound in the world	I can tell there was something missing that day
I will finally have time, when my children are too old to care	They prefer spending time with their friends	They go out of their way to spend time with you
Realize it is too late to build the bond you wanted with your children	You try to bond with them but there is no foundation	The bond builds
Having to say no when they ask for you to spend time with them	Feel the guilt	They still ask, knowing there is a possibility you will say yes
Trust	Run to me when they are upset	Avoid me
Vacations	Immediate increase in bond	Burn out
Missing milestones	You see the milestones only on video	You are the one recording it
They prefer playing video games than spending time with you	You only see your kids behind an I-Pad or computer screen	They stop playing computer games to say hello to you when you come home
You lose touch of what their favorite things are	They surprise you when you think you are buying something they like	You know what they would like
Reading to kids	They look forward to it	If you haven't read to them in awhile its awkward
Traveling	The kids talk about for months afterwards	They will ask for it everyday
Help kids with homework	They are less stressed about school work	They are stressed since they feel like they are on their own
They suddenly look taller	Self explanatory	You know what roller coasters they can ride on
They suddenly stop calling you daddy	You become dad	There is still a loving charm in their voice when they call you daddy
Safety for other drivers	Stay alert while driving	Risk of falling asleep while driving
Safety for my passengers	Stay alert while driving	Risk of falling asleep while driving
Unsafe to drive	Fall a sleep at the wheel at least once a week	Chance of falling a sleep while driving never an issue
No energy	Very difficult to complete any task	Even have strength to exercise
Safety for myself	Stay alert while driving	Risk of falling asleep while driving
No focus	Hours go by and you didn't accomplish anything	Feel like you accomplished a lot by the end of the day
Dizzy spells	Have to grab on to things especially after standing up	I can safely help tie my kids shoes
Catch colds easily	If anyone in my family has a cold I have it a couple of days later	I can safely take care of my sick family member without much concern
Procrastinate	Difficulty starting the task	Completing my to do list
Always irritable	Family keeps their distance	Able stay clear and calm
Way too much caffeine	4 double expressos, to keep going, is common	< 3 standard coffee/teas a day
Memory strength	Surprise people with my memory	Forgot why I walked into that room
Work effectively	Stay ahead of the game	Seems like there are not enough hours in the day
Keep up with the kids	They tire first	I tire first
Don't fall asleep while standing - I hate that	I don't dose off during the day	Fall asleep anywhere
Prevent dizzy spells	No dizzy spells	Almost faint during the day
Strength to exercise more	Exercise more than 3 times a week	Unable to exercise
It would be nice to yawn again. You body turns that off during long extreme periods of sleep deprivation. I haven't yawned in 10 years	Yawn like a regular person	Forgot what it was like to yawn
Acid reflux from too much coffee	Need tums or food to reduce reflux, though I am not hungry	Not a concern
Fall asleep while standing	You never know when or where you may dose off	Not worried about falling a sleep during a meeting
Dread each day	Don't want to get out of bed	Spring out of bed in the morning
Unable to focus	Only think about what worries you	You can focus on the task at hand
Keeps you up at night	Wide awake at 3am even though your exhausted	Fall asleep immediately
provide for family	They go without wanting	Cutting expenses
Sustenance	Pay the bills	Loss of basic necessities
Better secondary education for my kids	Kids happy with their school	Not happy, poor scores compared to national level
Simple issues now look big	Always worried about something	Take life as it comes
Want to ignore difficult tasks/issues	Everything seems insurmountable	Able to approach tasks
Inability to trade due to nerves	Take poor setups. Don't let winners run.	Patiently wait for setups
Always feel on guard	Can not relax	Feel safe
Heart pounds	Heart pounds to a point you are scared of your health	Breathing exercises is enough to clam yourself down
Different stresses are cumulative	Things add up during the day until a limit is reach, where you just shut down	Able to keep the stresses separate and in check
Hear turns gray	Its amazing, during stressful times, how fast your hair turns gray	Gray with age
Intrigue	Enjoy learning about the financials	Not even knowing the Nasdaq current level
Need	Have the materials to function	Don't have the basics, effects work
Financial freedom	Able to pursue more interesting work	Work for a paycheck
self-worth	Feel good about yourself	Feel the stress of not providing as much as you should
College fund	Staying with the needed savings plan	Worried how we will pay for it. Limiting my kids choices
Success	Created more than enough income	Not even following the right path to succeed
Fascination with markets	Eager to trade in the morning	Dread trading
Nothing to wake up for	Not easy to get before dawn for work	Spring out of bed in the morning
Difficult to find a meaning in life	You look but you can't find one	You know your role in this life
Not a good role model for kids	Scares me they might stop dreaming of the future	They tell me often what they want to do with their lives
Difficult to plan the rest of your life	You don't see the light at the end of the tunnel	You know your plan
No motivation	All tasks become difficult	Able to get yourself going
No meaning	You question why you do anything	You know why you do everything
The days have no distinction	All days become a blur	Everyday has a distinct meaning and memory
Forget things easier	When things have little meaning they are forgotten faster	More meaning more remembrance
Difficult to be happy	happy moments are brought down, because you ask why for everything	You can live in the moment
No path, no direction, meander	Difficult to make decisions when you have no directions	Decisions become easier
Panic that you will never find another job, at least at that level	You feel you and your knowledge is too old	You get calls from head-hunters very few months
Feel worthless	All your other accomplishments no longer seem significant	You know and can list your accomplishments
You start thinking about just getting a paycheck instead of a career	You don't care about accomplishments anymore	You get your projects done
Feel regret that you did something wrong to get laid off, even though thousands did with you	Can actually list reasons why, even though they are likely not a factor	No regrets, you move on with the opportunities awaiting
Question you career path	Wonder why you spent all those years in grad school and this job	You know it is a temporary directional change
Question the worth of your education	You could have been in the same situation without working so hold in school	You never forget the positive changes education has done to you
Lack of respect	Feel like a loser	You always respect yourself
Avoid conversations with people you haven't seen of awhile	You plan your day around avoiding people	Actively approach people
Life goes on hold	Mental block to plan any future event	You don't defer your plans
Even when you have steady employment, once laid off you always think you can be again.	Never think you have job security	Create a plan B and always have it in your pocket
Always tired	By noon you are just planning when you can get to sleep	Never slow down during the day
No stress relief	Stress builds	Working out reduces stress efficiently
Poor focus	The day seems to pass by without getting much done	Getting stuff done
Can not keep up with my kids	You start to watch them and not participate	You run them into the ground!!
Chronic pains arise	Seems every day a new pain	A pain once in awhile but its easily walked off
Unable to day trade	You lack it all the focus, the stress, the discipline and the patience.	Boy does it help.
Feel old	I always feel 10 years older when I am not fit	I don't think about my age much
Get injured easier	I just walk down the stairs and by the last step something hurts	Go running, hiking, or lift and it is not a concern
Lack of a hobby	there is a void in your life without a hobby	It great that exercise can double as a hobby
Headaches	They always start about two weeks without a good workout	I can go years without a headache when I am fit
Livelihood	Job more than a paycheck	Just a paycheck
Life Goals	"Never work a day in your life"	Job inspires no goals
Challenging	Creates interest to learn and adapt	Robotic
Fulfilling	Job fills at least one goal	Job does not fulfill any goal
Responsibility	People trust that you will complete the task	Checks needed for you
Role model for my children	You inspire them to do something they love	A job is just money
Team player	No one has to fight for credit	Free for all
Make use of education	PhD = Doctor of Philosophy	PhD = Pizza Hut Delivery
Part of something big	More like a quest	Just see the day to day grind
Pride	Proud to say what you do	Refer to yourself generically as an "engineer"
Feeling needed	People depend on you every day	Your not missed
Trusted	Answers/tasks are accepted without question	Always questioning you
Valued	Fell irreplaceable	Easily replaced
Missed	They feel glad when you returned	They had not noticed you were gone for a few days
Respected	Your opinion matters	Your thoughts are not worth anything
Self Esteem	You simply feel good about yourself	You feel like a disappointment
Achievement	Something recent that you are proud of	If you have to go back far in time to your last achievement
Make a contribution	Feel that others benefit from your help	Doesn't matter if you were there or not
Knowledgeable	They seek out to answer questions	Your opinion does not matter
Helpful	They expect that you will offer help and are grateful
Feeling needed	People depend on you every day	Your not missed
Trusted	Answers/tasks are accepted without question	Always questioning you
Valued	Fell irreplaceable	Easily replaced
Missed	They feel glad when you returned	They had not noticed you were gone for a few days
Respected	Your opinion matters	Your thoughts are not worth anything
Self Esteem	You simply feel good about yourself	You feel like a disappointment
Achievement	Something recent that you are proud of	If you have to go back far in time to your last achievement
Make a contribution	Feel that others benefit from your help	Doesn't matter if you were there or not
Knowledgeable	They seek out to answer questions	Your opinion does not matter
Helpful	They expect that you will offer help and are grateful
Creative	Positive responses for your "new" ideas	Rehashing old ideas
Continually improve	The world opens to you	Same old, same old
Read	Every day (audio books)	<4 a week feels like I am no longer reading
Learn new	Learn something new everyday	Can't remember the last thing learned
review old	Almost always recall useful info	Always unable to find useful info not recently learned
Increase understanding	Instinctively always want to know the "why"	Learn enough to finish the project
New skills	If you are struggling, you are learning something new	Everything is too easy
Learn Day Trading	Improving each month	Stagnating
Stay with new tech	You find yourself teaching other on the new tech	You see others using new tech and you have no idea how to use it
Keep a good memory	Surprise people with my memory	Forgot why I walked into that room
De-stressor	Tolerance for stress is high	Easily set off
Hobby	Working out is fun	Hitting the gym is a chore
Keep fit	You can feel fit	You can feel out of shape
Improve sleep	Deep sleep more than half the night	Light sleeping only
Improve mood	High tolerance	Short fuse
The great Outdoors	The reason I moved to California	What a waste moving to California
Time to myself	Then like to spend the rest of the day with people	Feel claustrophobic
Push myself	Proud of the workout	Felt like I wimped out
Time in the sun	Good day sunshine	Vampire
I want to climb Mt. Whitney	Ready for Whitney in 2021	Will I ever be ready for Whitney
Calm	Zen	On the edge of a mood swing
Mediation	The skill is getting easier	Not seeing any progress
Contentment	Living a worthy life	Going to die with lots of regrets
Quiet	Hear the roosters and cows	Hear only shouts
Time for myself	Take the short way home	Take the long way home
Interim between stressful events	Back to norm before the next event	Fires keep building on each other
Music	Listening to my daughter play piano	The day just doesn't seem as harmonic
Walks	Listening to books or bonding with my son	The bond with my son seems to drift
Pets	Unconditional love	Like something is missing
Sleeping child	Nothing more peaceful	I miss not seeing them sleeping in the mornings
Work less efficient	Always need to look back on what you were doing	You have an outline in your head that you can easily follow
You can feel it is getting worse	Less work done each day	Can see improvement with normal daily activities
Forgetting memories of your children when they were young	See an old picture and can no longer remember the event	Don't need to see pictures since you can recall the event clearly
Thinking you peaked some time ago and now just falling	You haven't accomplished what you wanted in life and now it is too late	Your making progress and there is still time
You extrapolate the worsening of the memory loss and think you will be useless by 65	You can't imagine providing for your family in a few years	Will be working until at least 70. NP
Difficulties trying to prevent it	You try the gimmicks and nothing works	Just the usual healthy living and you see it improve
Need to look up things I use to recall	Seems like that's all I do all day is look things up	I can just recall them. Very efficient
Can't remember why I walked into a room	I hate that, it is a constant reminder that you are losing your memory	You definitely notice when you stop doing it
You work with people who had a much worse memory than yours and now theirs is better	Nothing hits you more when you see this	You are the one in the meeting tat has the info at your finger tips
Hopes of getting another degree fade	I love learning. It hits you hard when you think you are no longer able	Still plan to go back one day for more learning
Anger
You feel immature	Nothing brings out the immature child in you	You pause with adult like control
Regret any action under the influence of anger	Once I calm down I am so regretful of losing my temper	It helps control my anger knowing I will regret it
Don't act like yourself	Its amazing who you become when you are angry	Stay yourself
Lose control	You become unpredictable	You control and determine logically what the next step is
My children are learning to have a short fuse	It is awful to see them copy bad behaviors	I make an effort to show how to deal with emotionally stressful times
Get other's angry	It is contagious	I rather put out the fire than spread it
Makes the world look last inviting	You think anything will set you off	The rest of the world is unrelated to your issues
It gets worse if not managed	It builds until anything will set you off	It is managed, forgiven and you move on
You forget what even got you angry	The anger lasts longer than the issue it self	The anger dissipates quickly
Hold grudges for a long time	I can hold a grudge for the rest of my life	Forgive and move on
Financial Worries
Difficult to plan your family's future	You feel guilty planning anything	Always planning and setting goals
Huge stress factor	You find your heart pounding and stomach growling for no reason	You have other things to think about
When its bad it dominates all thoughts.	You can have this stress on the front of your mind all day	You don't think of it
Disappointment as the primary family provider	It doesn't get much worse than that	You feel that you are providing well for your family
Money is leaving your accounts faster than it arrives	You see it every month when you pay the bills	There is financial stability
All expenses are now under scrutiny	The littlest thing now has to be a decision if to spend or not	You don't sweat the little purchases
Savings for college fund and retirement stop	You start thinking pay check to pay check	You save and invest
Your children don't understand when their friends go on extravagant vacations and they don't	It hurts	They have enough vacations they are not bothered by them
People start to think you are driving that classic car to be cool. And not because you can't afford a new one	You don't correct them	You buy a new car
At its worse it seems like everyone you know is buying a new car or house.	You seem to notice those things now	It is not more common than usual
Messy Life
Unorganized	Don't even seem to have the materials to get organized	Folders, binders, calendars, cabinets, etc. are all available
Finishing things at the last minute	Its difficult to start when you  know the first thing you need to do is find stuff	The things you need to start are handy
Messy house	Messy hours equals messy life	Clean house means clean life
Postponing tasks	Don't want to start working in this mess	Start tasks promptly. Have a daily task lists created
Not easy to find something	At least 20% of the task is looking	Not a factor in the task
Inaccurate personal calendar	Can no longer trust the calendar	Can't live without the calendar
Need to be reminded about appointments	No calendar, no schedule	I usually remind others
Delaying doctor's appointments	Just another thing to add to the list	They are important
Not Feng shui	Yikes! You can feel the energy sucked away from you trying to walk through the house	The house provides energy
Overdue library books	That goes without saying	Always check what is due

 

Then the course asked to make two lists. Firs list what trading means to you and the second list what others have told you about trading.

The Meaning of Trading

Hope to help my family's future

May give me more financial flexibility

Exciting

The effort improves my psychology

Learning the training skills keeps my mind sharp

Forces me to learn how to better handle stress

More in tune with world financial situation

Discovering my weaknesses

Fixing my weaknesses

Investing 15-20 hours a week of my time

Always wondering if I have what it takes to be profitable.

What others have told you about trading

It's hard

It's easy

Everyone has a stock they are recommending

Everyone wants to know what stocks you are investing in

Your going to lose all your money

Only the Wall Street professionals with the resources can be profitable

 

[Rob C 826]

Van Tharp Institute Peak Performance Course for Traders

Vol 3: How to Control Losing Attitudes

Chapter 4: How to use your brain

 

We mostly receive low quality data from the markets.

Psychologists estimate that 80%-95% of the information we pay attention to in our heads is total junk. So our thoughts are mostly junk we mistake as reality and the only info we get from the markets is vague concepts that adds more junk to your head. Oh boy!

This means that traders do not have direct sensory feedback about their trading performance.

Research shows that one of the most important attributes a trader can have is personal control. Only 10%, of the top traders, answered this question true: “I don’t have control over the direction of my life is taking.” 60% of the bottom traders answered it true.

There is a large difference between the world and our experience of it. Investment success comes from internally representing events appropriately; it has nothing to do with the events themselves. You trade your beliefs in the markets not the markets themselves. Investment success requires that you develop an adequate internal representation of yourself and the market.

Internal models develop through three processes: generalization, deletion and distortion. We generalize what we see or experience in the market. If we believe something about the world we pay extra attention to information that supports that belief. Contrary information is deleted. Deletion reduces the world to proportions we are capable of handling.

An interesting experiment performed on distortion. A group was given playing cards and asked to recognize them In the deck there were a few abnormal cards (like a red spade). Many, in the experiment, identified the abnormal cards as normal. Some, even with a long exposure (40x what was needed to recognize a normal card) were still not recognizing the abnormal card. They saw what they expected to see. We see patterns in the charts that we want to see.

We have to break through the distortions by analysis. The course now asks to take the answers from the DT (Distorted Thinking) test taken in the last chapter and the answer questions to help you evaluate your internal models.

If I answered true on any DT Test question I need to answer questions listed in the course. I only answered true on 3 questions out of 15. That seems like a low number. Not fully sure why I don’t generalize much. I did notice on my trader’s inventory profile, one of the very few positive attributes I had was I take responsibility over my trading performance (or lack of it). Maybe that helps.

The question I stated was true: After that one big loss, I’ve been afraid of that market.

Q: How does that loss cause you to be afraid? Do not feel in control.

Q: How specifically are you afraid? I feel that any trade in that market has a high probability for failure.

Q: What is it about the market that scares you? I feel I cannot trust any stock (or the CEO of that company) in that market

Q: Does that have to do with the market or you? Both

 

I should always cut my losses short? I answered true.

Q:What would happen if you didn’t cut your losses short? Their accumulated sum would be larger than my winnings.

Q:Should you always cut your losses short? No. If you have a really good stop and indicators are still in your favor, you may miss the big move.

Q:How should you cut your losses short? Ideally at break even.

 

Whenever my account value drops by more than 30%, I get depressed.

Q:If your account value did not drop by more than 30%, then you would not get depressed? Is that true? Not necessarily. If I am not seeing progress, or digression that would affect my mood negatively.

Q:What specifically depresses you? Not seeing progress over a large time scale.

Q:You would be fine if your account dropped by 20% or 29%? If I saw progress in my trading at the same time as the drop, that would be fine.

 

Trying to learn how I internally represent a memory the course ask you to choose a memory that occurred yesterday. Then review it step by step with respect to the submodalities supplied in the course.

My memory from yesterday occurred while my family and me were at a pumpkin patch. First the course wants to answer the questions from a visual memory perspective.

Was the memory visual? Yes

Visualize, did you see the picture? Yes  

 

Angle of view?  From my eyes

Brightness?  Darker than I know it was yesterday

Color?  The memory is in color, but minimally

Color intensity?  Weak

Contrast?  Weak

Distance from you? Closer than I know what really happen.

Focus? A bit blurry

Framed or panoramic?  Framed

Movie or still?  Still

Number of pictures?  ~5

Self in or out of picture?  Out

Size of central objects?  Correct human size

Size of picture?  ~3X3’

3-D quality? Good

 

Then you are asked to answer questions on how to remember while using your Auditory system.

Did you hear voices? Yes

Whose voices? My wife’s and daughter’s

Where were the voices located? To my side and behind me

Were they clear?  Yes

Loud? Yes

What was the pitch?  Realistic

Timbre?  Realistic

Was the rhythm present? Not really

 

Then you are asked to imagine you are on the ledge of a 40 story building, with the wind at you back. Then imagine looking straight down.

What were the details from your memory on the ledge, were the feelings intense or weak? Surprisingly intense

Was movement present?  Yes

Was it steady or intermittent?  Intermittent

Where were the feelings located?  Heart pounding

How much of your body contained those feelings?  Just the chest

Were your feelings warm or cool?   Cool

Did you feel texture?  No

Rough or smooth?  NA

Was it flexible or rigid?  NA         

Was any pain present?  No

These details are called kinesthetic submodalities.

 

Next ask to compare a time that you were stuck versus when you were resourceful. I compared when I was unable to get out of a trade on Etrade and another time I was stuck in a trade on DAS but figured my way out. My memory of both are just visual.

Stuck, Resourceful

Was the memory visual? Yes, Yes

Visualize, did you see the picture? Yes, Yes    

Angle of view?  From my eyes, From my eyes but a closer view

Brightness?  Darker than I know it was, Darker than I know it was

Color?  The memory is in color but minimally, in color

Color intensity?  Weak, normal

Contrast?  Weak, normal

Distance from you? Normal, Closer than I know what really happen.

Focus? A bit blurry, still blurry but better

Framed or panoramic?  Framed, Framed

Movie or still?  Still, Movie

Number of pictures?  ~3, NA

Self in or out of picture?  Out, Out

Size of central objects?  Correct, Correct

Size of picture?  Screen size, Screen size

3-D quality? Good, Good